Employee burnout is a growing problem. According to a recent article in , more than half of all employers are keenly aware that factors like stress, absenteeism, and “presenteeism” (in which employees are physically but not mentally present in the workplace) decimate productivity and hinder the business from reaching its goals.
Unfortunately, while employers know that employee mental health matters, few realize that one very simple tool can go a long way toward improving mental health, focus, and productivity: financial literacy.
What Is Financial Literacy?
“Financial literacy” encompasses all the skills workers need to understand about money matters: how money is generated, how to save or invest it wisely, and where to spend or donate it in order to get the best value.
Although financial literacy is crucial to personal financial security and professional business success, relatively few people understand the basics. A recent U.S. News & World Report article revealed that nearly 20 percent of U.S. high school students lack even basic financial literacy skills like the ability to balance a checkbook or read an invoice, and that these numbers do not improve as students age.
Why Does Financial Literacy Matter to Mental Health?
When employees lack financial literacy, this loss doesn’t just affect their ability to carry out their jobs, although, with the average employee handling money for at least one hour a day, this loss can be substantial. A lack of financial literacy can also diminish productivity on the job when employees stress about their finances rather than focusing on their work.
A 2014 Plans & Trusts article notes that one-third of Canadian households live paycheck to paycheck, carry an average of $27,000 in consumer debt, and save only 5% of their income, with $683.6 billion missing from potential employee and employer contributions to retirement funds each year. In the United States, the numbers are even more distressing.
Workers who lack financial literacy skills:
- Are more likely to worry about making ends meet, reducing their ability to focus on their jobs,
- Are more likely to miss work if a crisis occurs, as they scramble to find the money to cover a sudden emergency expense,
- Are more likely to continue missing work if an emergency expense prevents them from coming to work or forces them to leave early (for instance, if they cannot afford to get their vehicles repaired or a lack of funds makes the worker primarily responsible for caring for a sick loved one),
- May struggle to complete on-the-job tasks that involve money, adding to their stress at work,
- Find it more difficult to see how their work fits into the business’s overall “bottom line,” thus making it more difficult to find inspiration in the ways their work matters.
Many companies have attempted to address the employee mental health crisis by providing wellness programs, offering health insurance that covers mental health services, or reaching out with stress-busting “non-traditional” benefits like an employee break room, flex time, or massages. But if financial literacy is the problem, these measures are stopgaps at best, and wasting employees’ time and your money, at worst.
How Employers Can Help
Address the financial literacy gap to help your employees feel secure and focus on their jobs. Here’s how:
- Offer financial education training and encourage employees to attend. A recent study indicated that in-person training on financial literacy helped employees make proactive decisions about their own financial health.
- Make materials available even after training ends. Workbooks, webinars, and in-house discussion groups can all help employees put their newfound knowledge into practice even after an in-person training session has ended.
- Work with a qualified financial literacy professional. Hiring a speaker with a background in business and experience teaching workers at all job levels can help ensure that your employees get the information they need to thrive.
Boost employees’ mental health, productivity, and motivation by providing financial literacy training, and watch their business acumen improve as well. Fundamental Finance Academy offers on-site speaking, workshops, and private counseling in all 50 states. For more information, call (720) 507-8271.